OBAMA ON THE NEW WORLD (DIS)ORDER — President Obama at a fundraiser last night outside Seattle: “People are anxious. Now, some of that has to do with some big challenges overseas. I am very proud that we have ended one war, and by the end of this year we will have ended both wars that I inherited … But whether people see what’s happening in Ukraine, and Russia’s aggression towards its neighbors in the manner in which it’s financing and arming separatists; to what’s happened in Syria … to the failure in Iraq for Sunni and Shia and Kurd to compromise … to what’s happening in Israel and Gaza” …

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“Part of people’s concern is just the sense that around the world the old order isn’t holding and we’re not quite yet to where we need to be in terms of a new order that’s based on a different set of principles, that’s based on a sense of common humanity, that’s based on economies that work for all people. … But here in the United States, what people are also concerned about is the fact that although the economy has done well in the aggregate, for the average person it feels as if incomes, wages just haven’t gone up; that people, no matter how hard they work, they feel stuck.”

SIDE NOTE — It doesn’t just feel like wages haven’t gone up. For most, adjusted for inflation, they haven’t. So it’s not so much a “feeling” as a “reality.”

FALL PREVIEW: FRESH FISCAL CRISES? — Wells Fargo’s John E. Silvia and Michael A. Brown: “While the first half of this year has been relatively quiet on the fiscal policy front, Congress and the Administration now face a number of important … The next key deadline for policymakers is Sept. 30th … Given that the House is only scheduled to be in session for 18 more days before the end of the current federal fiscal year … the importance of progress on a continuing resolution has begun to increase.

“At the end of this year, an additional round of tax breaks expires on top of the more than 50 tax breaks that expired at the end of last year. Congress continues to debate extending some of the tax provisions that expired, but there currently is not an agreement that would retroactively reinstate these expired tax provisions. Oh, and Don’t Forget About the Debt Ceiling … The nation’s borrowing limit has been suspended until March 15, 2015.”

ABOUT LAST NIGHT: PERDUE COOKS IN GEORGIA — POLITICO’s James Hohmann: “Former Dollar General CEO David Perdue won the GOP Senate runoff in Georgia on Tuesday and will take on Democrat Michelle Nunn in one of the most closely-watched races on the map this fall. Perdue led Kingston, 51 percent to 49 percent, when The Associated Press called the race with 93 percent … reporting. Kingston entered as the slight frontrunner, even though he finished second in the May primary … Former Secretary of State Karen Handel and Rep. Phil Gingrey both campaigned with Kingston in the final weekend. …

“For much of last year, GOP leaders worried openly that ardent social conservative House members like Gingrey or Paul Broun would be the nominee. The fear was that either of them could make a Todd Akin-style gaffe that could cost the party another red state seat and make winning a majority that much harder. But both Kingston and Perdue were considered acceptable to the GOP establishment. Still, the general election to replace GOP Sen. Saxby Chambliss appears competitive. Nunn, the daughter of popular former Sen. Sam Nunn and a longtime nonprofit executive, led both Kingston and Perdue in two polls last week. She’s been one of the most impressive non-incumbent fundraisers nationally this cycle.” http://politi.co/1sOHTNi

TBTF REPORT COMING JULY 31 — American Banker’s Donna Borak and Victoria Finkle: “A government report detailing the funding advantage the biggest banks receive is likely to be unveiled on July 31 … The highly anticipated Government Accountability Office report, requested by Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., is the second part of a study begun last year to ascertain the advantages the largest banks receive … Brown is expected to call a Senate Banking subcommittee hearing on July 31, when the report is released to the public for the first time … The hearing would be the last day Congress is in session before it goes on August recess.

“Alternatively, Brown or Vitter, as the initial requesters of the report, could put a 30-day hold on the release of the GAO report, but sources consider that unlikely at the moment. While the final details of the report remain unclear, several sources said the GAO was expected to say the funding advantage held by the largest banks has been reduced. That may not be enough for big banks to declare victory, however, as the size of the subsidy could change over time.” http://bit.ly/1mBGx0w

BLOOMBERG HEADS TO ISRAEL — POLITICO’s Maggie Haberman: “Former New York City Mayor Michael Bloomberg said Tuesday he plans to fly to Tel Aviv on Israeli air carrier El Al. The media mogul’s announcement was a rebuke of the Obama administration, coming just hours after U.S. aviation officials barred flights there by American carriers. Bloomberg announced his plans in a statement after the suspension of U.S. carriers traveling to Ben Gurion International Airport in the wake of a Gaza-launched rocket landing roughly a mile away.

“‘This evening I will be flying on El Al to Tel Aviv to show solidarity with the Israeli people and to demonstrate that it is safe to fly in and out of Israel,’ Bloomberg said in the statement. ‘Ben Gurion is the best protected airport in the world and El Al flights have been regularly flying in and out of it safely. The flight restrictions are a mistake that hand Hamas an undeserved victory and should be lifted immediately. I strongly urge the FAA to reverse course and permit US airlines to fly to Israel.’” http://bit.ly/WCeokW

FIRST LOOK: MIDDLE MARKET TICKS UP SLIGHTLY — Per the Middle Market Indicator from the National Center for the Middle Market out this a.m.: “For the second quarter of 2014, the proportion of companies reporting improved performance is up slightly to 63 percent from 60 percent last quarter, the highest level over the past year … Looking forward, almost half (47 percent) of middle market firms expect to add workers over the next 12 months, projecting a mean total growth of 3.3 percent.” http://bit.ly/1kb9s15

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES – Kate Davidson on lawmakers pressuring the Education Department on its campus card rule [ http://politico.pro/1mBZFve] … For Pro's subscriber-only coverage -- and to get Morning Money every day before 6 a.m. -- please contact Pro Services at (703) 341-4600 or info@politicopro.com.

GOOD WEDNESDAY MORNING — Congrats to the New York Yankees for a wild and badly needed 2-1, 14 inning win over Texas last night. Chase Headley, in his first game in pinstripes, provided the walk-off single. Sadly Questlove had to leave after the 14 th to get to a gig. But props for sticking it out as long as he did. Here’s Headley’s Welcome to the Bronx moment: http://bit.ly/1o8WksN

DRIVING THE DAY — Despite some GOP criticism given the precarious state of the world, President Obama is keeping up his West Coast fundraising swing with events today in San Francisco and Los Angeles … House Financial Services has a hearing at 10:00 a.m. on assessing Dodd-Frank on its fourth anniversary. Among the panelists: former Rep. Barney Frank who can be counted on to both make some news and take some quality shots at his GOP interlocutors … MBA mortgage applications out at 7:00 a.m. … Treasury Secretary Jack Lew at 9am plans to deliver remarks at Treasury “recognizing outstanding projects undertaken by the Multilateral Development Banks.”

ALSO TODAY: RETAIL CALL — Per release: “The National Retail Federation … will host a special media briefing to discuss the state of the retail industry and current trends such as consumer spending, retail sales growth and what’s happening on Capitol Hill. … 10 a.m. … Members of the media must RSVP by emailing: press@nrf.com.”

THE BIG IDEA: WHY DODD-FRANK POLLING IS SUSPECT — AEI’s Karlyn Bowman and Jennifer K. Marisco: “Let’s be clear: there is no public opinion on the complex piece of legislation known as Dodd-Frank. Americans rarely give specific legislative guidance. They speak in broad terms about their concerns and values. And today, four years after the passage of Dodd-Frank, the severity of the crash and ensuing downturn continue to shape their beliefs about financial and other key institutions, government regulation, and the gap between the rich and poor. … In addition to taking a toll on Americans’ wallets, the long slump has exacerbated our loss of confidence in central institutions.

“The public is clearly aware of the distance that separates them from Wall Street’s tycoons, but this is hardly new. Americans have long believed, in the words of a question asked by Harris for almost 20 years, that ‘most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it.’ … Americans continue to support greater Wall Street oversight, but in most recent polls, they lean against additional regulation of business now, fearing that more regulation could further weaken an already anemic economy.” http://bit.ly/1wXW14K

** There is broad bipartisan agreement that the Federal Reserve should have the authority to tailor its rules for the insurance industry. The Senate approved S. 2270, the “The Insurance Capital Standards Clarification Act of 2014” by unanimous consent. Now it’s time for the House to act. Learn more at MetLife's www.responsibleregulation.com. **

HAS GOP GIVEN UP ON OPPOSING CFPB? — Darrell Delamaide in USA Today: “Have Republicans thrown in the towel on their opposition to the Consumer Financial Protection Bureau? After fighting tooth and nail to block creation of the new agency … Republican congressmen virtually failed to mention the CFPB in a new report on the shortcomings of financial reform. The 97-page report released this week by the House Financial Services Committee mentions the new agency only in the context of its inclusion in [FSOC] …

“This after voting against creation of the CFPB, seeking to block its funding, filibustering appointment of the first director, and berating the director once he was appointed in hearing after hearing for how much the agency was spending to renovate its new office space.” http://usat.ly/1jUdlqK

CIT STEPS UP A LEVEL — NYT’s Michael J. de la Merced: “For some, the financial crisis was very, very good. Five years ago, after the mortgage market had imploded, a group of investors — including the billionaire hedge fund managers George Soros and John A. Paulson — banded together to create a new bank from the wreckage of the failed California lender IndyMac. Now those investors are set for a big payday, thanks to the CIT Group, a lender that itself ran into trouble after the housing bust. … CIT said it would acquire the bank that rose from IndyMac’s ashes — OneWest — paying $3.4 billion in cash and stock to its hedge fund and private equity owners. The deal illustrates how casualties of the financial crisis have moved on, and even prospered.

“The deal is a coup for John A. Thain, the Wall Street executive who sold Merrill Lynch during the depths of the crisis and was later unceremoniously ousted from the bank. Under his leadership, CIT, a lender to small and midsize businesses, has grown — to the point where, with the acquisition of OneWest, it will be deemed a systemically important bank for the first time. Where the bank is now is a far cry from late 2009, when CIT spent 38 days in Chapter 11 protection to help put in place its corporate restructuring plan, Tuesday’s deal will roughly double the size of its commercial bank, to $28 billion in deposits and $67 billion in assets. And the cost of its funding will drop to about 2.4 percent. … ‘We have really repaired all of the problems coming out of bankruptcy,’ Mr. Thain said in a telephone interview.” http://nyti.ms/1A3RguG

CHINA DEMAND SAVES APPLE EARNINGS — FT’s Tim Bradshaw: “Voracious demand for the iPhone and iPad in China salvaged Apple’s latest quarterly earnings, as customers in the US and other developed markets opted to wait for the next version of the smartphone. Apple blamed speculation about the launch of new larger iPhones in September for causing ‘purchasing delays’, leaving group sales … slightly weaker than expected at $37.4bn. … A jump in revenue of 28 percent in greater China — outpacing 6 percent growth overall — and lower component costs ensured Apple still managed to beat earnings forecasts, with $1.28 per share. Net income rose 11.6 percent to $7.7bn.

“Expectations for a strong performance by Apple had been rising since it delivered better than forecast iPhone sales in the previous quarter. While Wall Street had forecast iPhone sales of around 37m in the third quarter, Apple reported 35.2m, albeit up 13 percent on the same quarter a year ago. However, Apple chief Tim Cook said that unit growth of the iPhone was ‘off the charts’ in China at 48 percent, with more to come as its new partner China Mobile rolled out 4G network coverage across the country.” http://on.ft.com/WA4DmU

FSOC TO NAME MET LIFE A SIFI — Bloomberg’s Ian Katz and Robert Schmidt: “U.S. regulators are poised to label MetLife … a potential threat to the financial system, subjecting the insurer to oversight by the Federal Reserve … A decision by the Financial Stability Oversight Council may come as early as July 31, when the panel is tentatively planning to meet … The vote could be delayed briefly because the council hasn’t formally closed its review of the company … MetLife, the biggest U.S. life insurer, could be subjected to stricter capital, leverage and liquidity requirements as a result of Fed supervision. The company has been under consideration as systemically important for more than a year, and its executives have met more than 10 times with council staff members to argue it doesn’t pose a risk. … The council vote would be a proposed designation, and MetLife would have 30 days to request a hearing before the FSOC to contest the decision. After a hearing, the regulators would hold a final vote on whether to designate MetLife.” http://bloom.bg/1lsSdTE

DEUTSCHE BANK U.S. ARM HAS BIG PROBLEMS — WSJ’s David Enrich, Jenny Strasburg and Eyk Henning: “An examination by the Federal Reserve Bank of New York found that Deutsche 's giant U.S. operations suffer from a litany of serious financial-reporting problems that the lender has known about for years but not fixed, according to documents reviewed by [WSJ] … In a letter to Deutsche Bank executives last December, a senior official with the New York Fed wrote that reports produced by some of the bank's U.S. arms ‘are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm's entire U.S. regulatory reporting structure requires wide-ranging remedial action.’

“The criticism from the New York Fed represents a rebuke to one of the world's biggest banks, and it comes at a time when federal regulators say they are increasingly focused on the health of overseas lenders with substantial U.S. operations. … The Dec. 11 letter, excerpts of which were reviewed by the Journal, said Deutsche Bank had made ‘no progress’ at fixing previously identified problems. It said examiners found ‘material errors and poor data integrity’ in its U.S. entities' public filings, which are used by regulators, economists and investors to evaluate its operations. The problems ranged from data-entry errors to not taking into account the value of collateral when assessing the riskiness of loans.” http://on.wsj.com/1rqohx3

ALSO FOR YOUR RADAR —

HEDGE FUND BATTLE PUERTO RICO — WSJ’s Mike Cherney: “A hedge fund is joining the legal fight against Puerto Rico's new debt-restructuring law. BlueMountain Capital Management … filed a lawsuit in federal court in Puerto Rico alleging the new law is unconstitutional. The law, approved by the Puerto Rican government in June, allows for Puerto Rico's public corporations, including its power utility and highway authority, to restructure its debts, a move that could lead to bondholder losses. The lawsuit follows a similar one filed in June by mutual funds managed by Franklin Templeton Investments and OppenheimerFunds.” http://bit.ly/UrcXUv

DODD-FRANK HEARING PREP — Per House Financial Services Committee Republicans: “While some media attention has focused on one particular witness who will appear at Wednesday’s Financial Services Committee hearing to assess the Dodd-Frank Act on its 4th anniversary, others will be testifying about the realities of Dodd-Frank. … Wednesday’s hearing will feature four witnesses from across the country who will discuss the real world harm Dodd-Frank is having on hardworking taxpayers and America’s Main Street Economy.

“In testimony submitted to the committee ahead of tomorrow’s hearing, community banker Dale Wilson, of the First State Bank of San Diego in San Diego, Texas, describes a ‘tsunami of regulation’ for his bank and similar community bankers throughout Texas. … The committee will also receive testimony from Anthony Carfang, who consults with state and local governments, hospitals, universities, and regional banks in the area of treasury management. Carfang’s submitted testimony echoes Wilson’s description of the increased red tape burden of Dodd-Frank.”

SPITZER HEARTS WARREN — From CNBC’s Squawk Box on Tuesday, Eliot Spitzer to Joltin’ Joe Kernan: “I'm a huge fan of Elizabeth Warren. you probably disagree with me. … I don't think she's going to run … Would it be good? Yes. For the nation at many levels.”

** There is broad bipartisan agreement that the Federal Reserve should have the authority to tailor its rules for the insurance industry. The Senate approved S. 2270, the “The Insurance Capital Standards Clarification Act of 2014” by unanimous consent. Now it’s time for the House to act. Learn more at MetLife's www.responsibleregulation.com. **

** A message from the Independent Community Bankers of America: The first U.S. community banks were formed in the wake of the American Revolution to stabilize the nation’s postwar finances. By providing loans to entrepreneurs and developers, these community banks were soon stimulating economic growth and financing the rise of the world’s greatest democracy. Their legacy of relationship banking and local economic and job growth continues to this day, with more than 2,500 of the nation’s community banks in business for more than 100 years and the oldest dating to the presidency of John Adams. Today serving communities in every congressional district, community bankers nationwide urge Congress to advance tailored banking regulations that will allow these job creators to continue supporting local economic growth for decades to come. www.icba.org/aboutus **

Authors:

About The Author

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.